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Compliant or Secure?

Compliant or Secure?
Certain industry sectors – such as banking/finance, healthcare, and defense contracting – have government mandated requirements for protecting sensitive information; for example, private healthcare records or export-controlled intellectual property. These industries tend to be serious about investing in cybersecurity measures; because, frankly, if they don’t, they will not be able to operate. Regulatory fines will rain down upon them, reputation damage will ensue, and soon, they will be out of business. Anyone who has been to the doctor lately is probably familiar the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which was designed to help protect private medical data. The law has a Breach Notification Rule that requires covered entities and their business associates to provide notification following a breach of unsecured protected health information. Look at the "wall of shame" maintained by the U.S. Department of Health and Human Services Office for Civil Rights that shows some of the offenders who allowed unsecured protected health information to get into the hands of hackers. Imagine if your business name were on that page. What is brand image and reputation worth to your company? While there is currently no cybersecurity legislation specific to the multifamily housing industry, there is emerging data breach regulation at both the state and federal levels that could have an effect on the industry.  The NMHC/NAA Joint Legislative Program published a white paper called “Multifamily and Cybersecurity: The Threat Landscape and Best Practices” that provides an excellent summation of this regulation. The European Union (EU) has always been ver......
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How Can Cities Address the Affordable Housing Crisis

A few weeks ago I wrote about the prospect of the repeal of Costa-Hawkins act in California.  This measure is being pushed by tenant rights groups claiming it will help with affordable housing.  Although I do believe there is an affordable housing crisis, I do believe that the repeal of Costa-Hawkins  would only be a short term relief and significantly hurt affordable housing in the long term.  So what can cities do to address the affordable housing crisis? Cities have many tools available to them, and if utilized correctly can significantly positively impact the affordable housing market.  It boils down to simple economics, if a developer can build affordable housing, and make money doing so, then they will.  How can cities promote the development?  It starts first with the approval process.  After the cost of land and actual hard construction costs, the time cost and soft costs are the highest expenses for a developer.  The city of Dallas did this earlier last year.  They passed measures to streamline the process to construct affordable housing.  By streamlining local administrative review of plans, and lowering the costs of permits they have made it easier for developers to develop low income housing.  With faster approval processes and lower costs affordable housing becomes that much more attractive to a developer.  Another benefit for streamlining the process is that it minimizes the risk to a developer, and like any other investment development is a risk vs. reward calculation, with lower risk translating to lower demand for r......
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What You Need To Know About Rent Concessions

  on What You Need To Know About Rent Concessions With rent concessions on the rise nationwide we need to have an understanding what giving or offering a concession can do to your property value if not handled correctly. Let’s start with the definition of a rent concession, a concession is any “reduction in price, rent or other benefit provided to a potential tenant as an inducement to lease your property”. There are many ways to give a concession, reducing the first month’s rent, reducing rents for a contracted time or maybe even upgrades the property they are considering ie: an accent wall or upgraded appliances. Your goal should be to have all scenarios have about the same amount of rent paid.  Also, if you can get a new tenant to accept an upgrade to the unit as a concession, it can be even more beneficial to you. What you need to consider as you are offering your concessions is how do these concession affect my long term value of my investment.  If you find yourself wanting/needing to refi and you begin the underwriting process you will find that lenders are interested in how much income an asset is producing and how much income an asset can optimally produce. Concessions add an additional layer to the equation. When underwriting the Net Operating Income of an asset, concessions are typically subtracted from the Gross Rental Income in order to determine the Net Rental Income — which also factors in things like vacancy and unpai......
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What are the challenges in loan approval?

There are three distinct but equally significant components to loan approvals for all investor properties.  The first component is an analysis of the property, the second is a review of the borrower’s credentials, and the third is an internal lender approval of all third-party reports. Step One - Property Analysis In this analysis we are looking at a few separate aspects of the property.  In summary, this would entail a review of the rent roll, income and expenses, the property condition, past capital improvements, and finally how the asset competes in the market.   While it may seem that the most critical issue is current Net Operating Income, the property condition and market factors could affect the forward financial success or deterioration of that NOI.  Providing everything is acceptable, the underwriter now must input these findings into the lender’s own criteria standards and adjust accordingly to derive at the maximum loan amount, best rate and terms, and other conditions for final approval. Step Two - Borrower Review Every lender and loan program will have different standards for what constitutes an acceptable borrower.  In this review we do look at the entity itself, but the real focus is on the principals of that entity.  For over 95% of lenders, a principal is defined as anyone that owns more than 15 to 20% of the entity.  In cases where no one owns such a percentage, the underwriter will instead focus on the managing principals of the entity.   Whether recourse or non-recourse, the review is t......
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Don't Let the Sign Police Outsmart You- Know Your Sign Code!

Sign Police- Just say No!                  We all know that sign code enforcers love to catch us trying to advertise our properties! When I leased for CLASS in the late 90's, most of our clients were under the belief that they really couldn't do much advertising with temporary signage and balloons. It was our job to educate the client and ourselves on the code and rethink how we work around what is permitted/not permitted.  Over the years sign code has closed some of the loopholes we found, but there are still some there if you are savvy enough to find them. We recommend becoming familiar with your sign code and keeping a copy saved to your desktop. Code enforcers take advantage of the fact that most properties are unaware of what their sign code says. Back in the day, we used to put a banner on our rental car and tie balloons to the antenna to attract drive by traffic. We've used bubble machines in Orlando, FL (strictest sign code EVER), purchased the largest American flags allowed by code (they could be seen from the interstate!), and lined the wrought iron fence with red, white, and blue buntings. There is a way around pretty much any code, if you just look hard enough. I challenge each of you to peruse your local sign code and come up with a few ways to advertise your community using temporary signage, balloons, sign spinners, etc. It is as easy as 1-2-3! 1. ......
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Three Things "Temps" Should NOT Do!

Three Things "Temps" Should NOT Do!
Years ago when I was a community manager I had a season of time when I relied heavily on temporary associates to maintain the staffing requirements of my office. There were many times when my “temps” made my job easier and I was so glad that they were helping me. There were also many times when my “temps” either made my job harder, or were so difficult to be around in one way or another, that I didn’t think they were worth the expense! If you’re a temporary associate now I’d like to give you some advice on what to do when you’re at you’re assignment so that the company wants to keep bringing you back-or even offer you a permanent position! Tip #1: Don’t be Bossy! I had a temporary associate who started critiquing me on how we accepted checks and thought it was a good idea to give me his thoughts on what we should have been doing when collecting checks from our customers. Needless to say, that immediately irritated me as I thought, “Who does this guy think he is??” Regardless of the experience you bring into the office, remember as a temp that the client may not need your input on things…even if it’s great input! For those of you with a great resume this may be the hardest thing to do as a temp, and it’s a vital skill. As a wise mentor once told me, “Never miss an opportunity to keep your mouth shut!” Tip #2: Don’t Say “When I worked at…”......
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An Experienced Team Adds Value To Your Community

Marketing numbers  Possibly the most valuable asset in property management is an experienced team. Properties with tenured, long time employees benefit from: development of annual systems. they have noticed, realized and anticipate occupancy trends. they create and build relationships with residents, which improves resident communication, rent collection and resident retention. Preventive maintenance is incorporated into the monthly schedule without fail. Staff Endorsement A experienced team is an unspoken endorsement for a future resident. “I like working here, you’ll like living here.” Including this information in the introduction of team members to new residents, creates a sense of stability.These individuals, three, five, nine, ten, fifteen and even twenty years of seniority, bring immeasurable experience, wisdom and common sense to the workplace with them every day. A new manager, or newly promoted can offset any short term insecurities, by acknowledging “I’ve been in my role as a manager for a couple of months but I’m surrounded by 18 years of property management experience. Internally, we acknowledge our team members as our best practice experts. Rebecca has developed a fantastic system for this process. The organization would be lost without her. A question develops regarding a capital improvement or a unique repair, ask Bob, he’ll know the answer, find it for you or point you in the right direction. A new initiative to roll out, Abby will be the team leader for that. She’s overseen all of our transitions. That property has been stuck in an occupancy rut for a couple of weeks, have Carl take a look at the op......
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7 Powerful Questions to Boost Resident Retention

Let’s face it: resident renewals are much less expensive than attracting new residents. So why don’t we spend as much time chasing the satisfaction of our current residents as we do pursuing new ones? My mantra for property managers is: Focus on transforming your properties to better serve the residents you already have. Optimize your properties with your current residents in mind and you’ll see a much higher return on your invested resources -- including a boost in your NOI.   Softer rents demand better performance We’re in the middle of a long- running positive rent growth cycle that’s now starting to see a decline. Sure, some rents are continuing to grow, but for the first time in several years we’re beginning to witness rent softness and even negative growth in some cities and submarkets. To put it bluntly, this is a pivotal time for property management firms. Underperforming properties are likely costing you more than you realize, and you’re at risk of losing even more if your current residents don’t renew their leases.   Improve operations to increase satisfaction It’s essential that everyone on your team -- from VPs to vendors -- work together to improve your properties through the lens of your residents. Any attempt at increasing NOI absolutely must be a team effort if it’s going to be successful. In my experience, one of the best ways to foster collaboration is to proactively measure performance. So here are 7 questions I suggest every manager ask themselves as they consider making cha......
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Lead Management in a Hyper-Connected World

When it comes to lead management, most apartment operators have fairly rigid standards.   Respond to all emails within 24 hours. Manage automated responses to all digital inquiries. Secure a call center that handles all after-hours calls.   But in today’s information-obsessed, instant-gratification world, that simply isn’t enough. Twenty-four hours is far too long to wait for a response. That prospect will reach out to several additional communities in that time, and the longer you wait, the further you fall on their consideration list.   Today’s Generation Z and Millennial prospects expect real-time communication options such as texting and online chat. It’s all about mobile access and speed. They can book a hotel or make a restaurant reservation at 2:37 a.m., so they expect to be able to book a tour of an apartment community at their convenience.   It’s a real challenge for many apartment operators to meet that increasing demand for immediate feedback. The more effectively a community can provide real-time answers, the better chance it has of securing leases.   Here are a few ideas to consider:   Equip leasing agents with company-issued mobile phones: Leasing teams still have to tour prospects, attend community events and solve resident complaints. But empowering them with company-issued cell phones will increase their ability to engage with prospects in real time while managing those other duties.  Just because a leasing agent is away from their desk doesn’t mean they’re tied up in a face-to-face interaction with a prospect or resident. The ability to fol......
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Understanding Renters Insurance Coverage

Around 95% of all homeowners presently have homeowner’s insurance. But, in 2016, just 41% of renters had renter’s insurance, despite the multiple benefits it brings to policyholders. Unlike the name suggests, renters insurance plans do more than just cover your personal items or protect you from the cost of damaging your apartment. They bring a bundle of benefits that make it well worth the small monthly charge. This article will discuss what renters insurance actually is and isn’t, who and what is covered by the typical renters insurance policy, and how you can calculate the extent of coverage you are likely to need. What Is (and Isn’t) Renters Insurance? Simply put, renters insurance covers you, anyone named on your policy (like your partner and children), your stuff, and additional costs. These could include temporary living expenses or medical and legal fees that might be incurred if you had to vacate your home for a short period or pay for damage caused to someone else or their property. May people think they don’t need renter’s insurance for a number of reasons. The three most common are listed below: Your landlord has insurance. While this may be the case, it will only cover the structure and any items that belong to them – it won’t cover you or your possessions. It costs too much and you don’t have anything worth covering. Renter’s insurance can cost as little as $5 per month. If you think you don’t have anything worth covering, just imagine for a moment what it would cost you to r......
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